Mechel Signs Loan for Second Line at Sibirginskaya Coal Mine
02/08/2011 - Mechel OAO has signed a loan agreement to finance construction of the second line at the Sibirginskaya mine, which is owned by Mechel Mining OAO subsidiary Southern Kuzbass Coal Company OAO.
Mechel OAO has signed a loan agreement to finance construction of the second line at the Sibirginskaya mine, which is owned by Mechel Mining OAO subsidiary Southern Kuzbass Coal Company OAO.
According to the terms of the agreement, Transcreditbank OAO grants Southern Kuzbass Coal Company OAO a loan of 6.189 billion rubles (approximately 210.4 million US dollars*). Funds must be disbursed by December 31, 2012, and will be repaid in equal monthly installments, beginning in February 2014 and through December 2015.
The loan will finance equipment acquisition, construction of buildings for the surface complex, and excavation for the Sibirginskaya mine’s second line, which will bring the enterprise’s capacity up to 2.4 million tonnes of coal per year. The increase of production volumes at the Sibirginskaya mine is to be achieved gradually, with the second line scheduled to be launched in October 2014.
Sibirginskaya’s first line is operating with a design load of 1.2 million tonnes a year, with the plant’s ultimate reserves set at over 90 million tonnes.
“We signed a loan agreement to finance a major project in our coal division scant days after the announcement of our successful 2010 operational results, which showed that we managed to overcome the crisis and exceed our pre-crisis production levels,” commented Mechel Chief Financial Officer Stanislav Ploshchenko. “This deal testifies to the legitimate confidence banks have in Mechel.
“When the Sibirginskaya mine’s second line is launched, it will double the production capacity of the plant producing valuable coking coal grades, which makes this project particularly important,” added Ploshchenko.
* According to the Russian Central Bank exchange rate of 29.4136 RUR/$ as of February 7, 2011.
Mechel, one of Russia’s leading companies, conducts business in four segments: mining, steel, ferroalloy and power. Mechel unites producers of coal, iron ore concentrate, nickel, steel, ferrochrome, ferrosilicon, rolled products, hardware, heat and electric power. Its products are marketed domestically and internationally.
